Parliament approves 2014 budget

Budapest, December 17 (MTI) – Parliament approved Hungary’s budget for 2014 today with a vote of 252 to 84.

The budget shows revenue of 15,983.7 billion forints and expenditures of 16,968.3 billion forints, producing a deficit of 984.6 billion forints (EUR 3.27bn).

The budget bill, tabled by Economy Minister Mihaly Varga, planned the pension fund and the health-care fund to break even next year.

At the time of its submission, Varga said the budget bill was planned calculating 2 percent economic growth, a 2.9 percent budget deficit and 2.4 percent inflation for next year. He said household consumption would grow by 1.9 percent and real wages by 2 percent in 2014.

Addressing parliament before the final vote, Arpad Kovacs, head of the Fiscal Council, said the government’s economic projections were realistic, but he gave warning of the risks in keeping the budget deficit on target. He said the 2014 budget could improve the economic environment and the country’s assessment which in turn would improve investor sentiment.

Janos Veres, former finance minister and a lawmaker of the Socialist opposition, said the government’s decision, passed earlier in the day in the chamber, to lower a tax on severance pay from 98 percent to 75 percent could compromise the budget revenue. He said this tax change should have been considered before voting on the budget.

Kovacs responded to Veres’s concerns, dismissing fears that the tax change could modify revenues significantly.

The budget act states that pension hikes next year should be calculated with an inflation rate of 2.4 percent.

It also gives the government leeway to take on guarantees worth 100 billion forints in 2014.

The public debt-to-GDP ratio is planned to fall from 77.4 percent expected at the end of 2013 to 76.9 percent by the end of 2014, calculated with a forint-to-euro rate of 296.9.

Next year’s budget targeted revenue of 269.4 billion forints from the financial transactions tax and 57 billion forints from the telecoms tax.

Parliament approved the key numbers of the budget on Nov. 26. and lawmakers have been given the vote on regrouping funds between budget chapters only. In one of these moves, 12 billion forints were laid aside for a National Stadium Development Programme.

Photo: MTI – Noémi Bruzák

Source: http://hungarymatters.hu/